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Skadden, Kirkland Drive $12.3 Billion Deal for Cybersecurity Firm

Kirkland & Ellis is mentioned in Law360 regarding the Firm's role in Thoma Bravo's agreement to buy ProofPoint.

Proofpoint Inc. will be taken private by investment firm Thoma Bravo in a deal that values the cybersecurity firm at roughly $12.3 billion and was put together with help from respective legal advisers Skadden and Kirkland, the companies said Monday.

The acquisition adds to Thoma Bravo's portfolio a company that provides cybersecurity and compliance solutions to companies around the world. The all-cash agreement sees Thoma Bravo paying $176 per share, equivalent to a premium of about 34% over Proofpoint's closing price on April 23, the last full trading day before the deal was announced, according to a statement.

"Proofpoint has established itself as a true powerhouse in the cybersecurity sector due to its innovative suite of market-leading products and impressive customer base of leading companies around the world," said Chip Virnig, a partner at Thoma Bravo. "As the sophistication of cyberattacks continues to increase, Proofpoint is delivering the most effective solutions to help organizations protect their data and people across digital platforms."

The take-private transaction follows a year in which Proofpoint generated more than $1 billion in annual revenue, making it the first software-as-a-service cybersecurity and compliance company to research that milestone, according to Gary Steele, chairman and CEO of Proofpoint.

"We believe that as a private company, we can be even more agile with greater flexibility to continue investing in innovation, building on our leadership position and staying ahead of threat actors," Steele said in the press release. "Thoma Bravo is an experienced software investor, providing capital and strategic support to technology organizations, and our partnership will accelerate Proofpoint's growth and scale at an even faster pace."

The agreement, which features a 45-day "go-shop" period giving the target's board the ability to consider potential alternative offers, has been unanimously approved by the Proofpoint board of directors. It remains subject to customary closing conditions, including approval from Proofpoint shareholders and relevant regulators. The companies expect to clinch the deal during the third quarter of this year.

Proofpoint, founded in 2002, is based in Sunnyvale, California.

Thoma Bravo has been busy buying businesses in the areas of tech and cybersecurity. In March, the private equity firm paid roughly $2.4 billion for Talend SA, which provides enterprise software to help businesses organize, integrate and analyze their data across traditional systems and cloud environments. In December, meanwhile, Thoma Bravo invested in cybersecurity company Venafi, in a deal that valued Venafi at $1.15 billion.

Morgan Stanley & Co LLC is acting as exclusive financial adviser to Proofpoint, with Goldman Sachs & Co. LLC serving as financial adviser to Thoma Bravo.

Skadden Arps Slate Meagher & Flom LLP is advising Proofpoint and Kirkland & Ellis LLP is representing Thoma Bravo.

The Skadden team includes M&A partner Mike Ringler and associate Peter Jones; executive compensation and benefits counsel Page Griffin; intellectual property and technology partner Ken Kumayama; banking partner Kristine Dunn; antitrust and competition partner Steven Sunshine; CFIUS and national security partners Jeffrey Gerrish and Michael Leiter; labor and employment law partner David Schwartz; and tax partner Nathan Giesselman.

The Kirkland team is led by corporate partners Corey Fox, Bradley Reed, Peter Stach and Erika Lopez and associates Andrew Struckmeyer, Chad Rogers, Demetrius McCloud and Yoshi Haynie.

Gibson Dunn & Crutcher LLP that is advising Morgan Stanley & Co. LLC as financial adviser to Proofpoint, with a team led by partner Christopher Dillon and including associate Yujin Yi.